Tesla Aims to Win Over Skeptics With Battery Swap Stations

Tesla Motors has added battery swap to its arsenal of technologies aimed at displacing gasoline-burning vehicles.

In a demonstration before a packed house of electric car enthusiasts, Tesla chairman and CEO Elon Musk showed how an automatic battery-switching system could remove a battery from a Tesla Model S and replace it in 90 seconds -- about two-and-a-half minutes less than it would take to refill a fuel tank at a gasoline station.

”What we really want to show here is that you can actually be more convenient than a gasoline car,” Musk told a cheering audience at Tesla’s design studio two weeks ago. “Hopefully, this is what convinces people that electric cars are the future.”

Tesla’s flat battery pack at the bottom of the Model S makes it possible for automated battery swap systems to replace the pack from underneath. (Source: Design News)

During the demonstration, Tesla actually swapped out two batteries in less time than it took to refuel a single vehicle at one of Los Angeles’s fastest filling stations.

Musk said Tesla will install the battery-swap machines, which reportedly cost about $500,000, at its charging stations across the country. Businessweek.com and other news organizations reported that battery pack replacements would cost customers approximately $60 to $80 each and that vehicle occupants wouldn’t even have to step out of the car. Rather, an automated machine underneath the car would remove the existing battery pack, along with its cooling system, and install a replacement.

”We have automated nut runners -- the same nut runners we use inside the factory,” Musk said at the demonstration. “And they find where the bolts are, and automatically torque the bolts to the exact specification that each bolt needs.”

Automotive industry analysts predicted the technology would be effective, but said the effect wouldn’t be widespread. “It will be significant, but in small numbers,” Dave Hurst, senior analyst for Navigant Research, told Design News. “It will play a big role in some fleets -- such as taxis -- that decide to go with battery-electric vehicles. But the effect won’t be huge, even for Tesla.”

The technology still faces hurdles, analysts said. The first is the difficulty of standardizing such systems so that the technology could spread beyond Tesla, to the rest of the electric car market. The second is finding ways to swap batteries of roughly equivalent value.

”Even if Tesla deploys these systems, the GM Volts and Nissan Leafs won’t be able to use them,” Cosmin Laslau, mobile energy analyst for Lux Research, told Design News. “It’s a question of having to engineer the entire vehicle architecture to be able to do the battery swap.” Laslau added that the inability to get automakers on board was one of the issues faced by Better Place, a battery-swap company that filed for bankruptcy protection in Israel in May.

For consumers, however, a bigger issue might be their willingness to trade a good, $20,000 battery for one that might be inferior. “That’s a serious concern,” Laslau told us. “Tesla will have to be very careful in how it measures the state of health of these batteries. When they swap it out, they’ll have to run diagnostic tests. And when they get a bad battery, they will have to deal with that customer directly.”

For now, however, Tesla is confident that the technology adds a new dimension to its network of supercharging stations, which now offer free fast-charges to Tesla customers. “The only decision you have to make when you come into one of our Tesla stations is do you prefer faster or do you prefer free?” Musk said.

I was speaking specifically about my requirements and desires for a mode of transportation. You can choose whatever you want; I'm not pushing my views on you – you are the crusader. But you have yet to offer a solution. Instead you hysterically rant as opposed to providing a reasoned argument. Your glass must be half empty... and your earth, flat.

It was actually a pretty good post. Labeling Nexsen as anti-EV for simply pointing out challenges that will need to be address in the proposed business model seems a bit hysterical.

Your examples, the first of which are in the dustbin of history and the second is a start-up in a country with a quasi-command economy, don't help the case for swappable batteries. Please provide something substantive if you wish to help address these very real issues.

This is an innovative way to market your product and I definitely wish them well. Charles, do we know what prompted them to undertake this option? Was it a drop (or lack) of sales or other considerations? Specifically, quality in construction and assembly or reliability during operation? I definitely agree with one comment in that it will be very interesting to see what happens to the entire EV market when the FED removes any and all tax credits. Will the products stand on their own? I suppose time will tell. Excellent post.

Rather amusing that you go after another for a "strawman"-that is precisely what you do here to Watashi.

He merely gives his take (and I suspect with some tongue in cheek) on what it would take for himto buy, even notes he is willing to compromise some functionality.

You then expand it into a sweeping statement that "Nobody should buy EVs until they're superior to gas cars in every way and cost a fraction of the price of the guzzlers we love so much." This is nothing like what he stated yet you project it on him. Pure strawman. Classic.

I have noted you using this approach in previous blogs and resisted bringing it up-your taking another to task for the same was just a bit much to swallow.

BetterPlace did exactly that over here. They ddin't just talk about it, they built the battery swap stations all over the country, and put the cars on the road. Then they went bust. And this in a country where fuel costs 8$/gallon. Part of the problem was targeting teh wrong market - they should have gone after the light delivery vehicle and second family car market, instead of the family sallon segment. Tesla is facing the same problem - the market segment for their type of vehicle doesn't fit the business model.

A ten year battery life is a reasonable guess, and the price is anyboy's guess, since there are too many variables to allow an accurate calculation, or even a good guess. So really the whole argument is a comparison of guesses, and just about as worthwhile.

But I do challenge the assertion that petroleum wull become that terribly scarce, unless the governments choose to make it scarce, which is a very real possibility. There are too many individuals who intensely hate the freedoms that "the masses" have, and they really believe that if everyone could be forced to do things their way, "utopia" would follow. Some of them are very subtle and you would not recognize their agenda, others are more open and we recognize them as serious left-wingers.

Really, electric vehicles of whatever kind will need to make it on their own, since the government can't subsideize them forever, and it is quite hard to make people buy things that they really don't want. And taking away the alternatives would be a good way to start a revolution, so it would be a very poor choice.

Barring a major breakthrough batteries will remain a major fraction of the cost of electric vehicles. It's currently over 30% for expensive models and will increase as mass market (cheaper) models evolve (as a % of car cost even though battery cost may drop).

Who says batt cost will increase as a % of the car cost? A Volt battery might now be 50% of the $40k car price, and if they reduce costs by $10k and pass those on, it will be a $30k car w/ a battery that's only 33% of the total. Down, not up (but who really knows)?

It may take a few years to happen but one blogger above correctly pointed out an owner of a new Tesla (3 years from now) may be reluctant to exchange his expensive battery (even $150/kwh is amost $13,000 for an 85 KWH battery) for one 3 years old an unknown number of charge cycles so much closer to its end of life.

Maybe, or they'll prefer the odds that the replacement is newer/better, or if they're concerned maybe they'll opt to have their original shipped back to them, as Musk announced as an option. Rich buyers, rich options, right? This whole exchange is a premium service for the more well-heeled (and Design News commenters who think EVs are a failure because the range is too low and it takes too long to recharge).

...But who is going to suffer the cost of wear and tear and the eventual demise of the engines? Or batteries?

You might say Tesla, right? That assumes they can build in a cost for each battery exchange and create a sinking fund to replace the battery when it reaches EOL.

But that won't work. Reason: No one is forced to use the echange program so that reveue to retire the spent battereies isn't linked to that cost. As an example I might never use the exchange service and charge my battery free (or from home power) until close to its EOL and then go to an exchahge station, pay the minimal fee and drive away with a much newer battery (presumamby) for practically no cost.

I don't think the program will be structured to allow such abuse unless costs are covered to make that an intended feature.

Have you ever used the propane tank exchange services? Yes, their prices seem exorbitant compared to stations that refill customer tanks but the reason is not just opportunistic price gouging. Take a look at the cutomer returned tanks! Many must be scrapped and that cost is reflected in those prices.

Just as in my Tesla example a customer who has always refilled his tanks with no revenue going to the exchange provider can take his tank to a convenience store and get a new (or newly refurbished) one and all the exchange provider gets is the excahnge fee. These propane tanks are only about $25 but even so the exchage provider does not charge that much above the gas cost so he loses money when a customer's exchange must be scrapped and the rest of us must pay for it.

Is this a fair comparison? The two different propane sales options are more like comparing single serve beer bottles to a refill in the same glass from a keg. Bulk sales are virtually always cheaper for obvious reasons.

The only way I see this working is for Tesla to own the batteries and charge the customer fees to cover its cost over its useful life. There would probably be a fixed fee based on no recharging (just leasing the $25K battery and neber owning it) as well as a fee based on charging cycles assuming that is a measure of battery life.

Assuming a $25K battery and money at 3% $750/year would be needed to cover the investment opportunity cost alone without any depreciation or amortization but we know it can't last forever.

If the battery has a finite life based on charging cycles that cost would need to be recovered in addition. I don't know that value. If 1000 cycles then another $25/charge. If it's 5000 cycles then only $5/ charge. And if its life is use and time related (like 5000 cycles or 10 years whichever comes first) then that needs to be factored in.

Amortizing the $25K battery over 10 years at 3% would require payments of $241.40 per month so I expect that might approach the minimum charge to the consumer to make such a program viable. If the cost per charge cycle were $25 and he had more than 10 per month the fee would need to increase to cover the fact that he was depleting the life expectancy faster than the 10 year amortization recoverd its cost.

Where are you getting all these costs and assumptions??

These are just some thoughts based on pure guesses (as to a 10 year life and costs per charge cycle) and are meant to be examples of factors that need to be addressed in any battery excahnge that is sustainable. Manufacturers (Tesla included) are certainly free to take revenue from one area (new car profits) to subsidize another (like free electricity for charging or battery exchange programs) but one way or the other the revenue must come from somewhere. With new car sales growing it's possible profits for such subsidies could continue for a long time but at some point the sum of prior car sales using those subsidies will overshadow new sales to subsidize them and those programs must be sustainable on their own.

Some cars are more reliable than others, but even the vehicles at the bottom of this year’s Consumer Reports reliability survey are vastly better than those of 20 years ago in the key areas of powertrain and hardware, experts said this week.

As it does every year, Consumers Union recently surveyed its members on the reliability of their vehicles. This year, it collected data on approximately 1.1 million cars and trucks, categorizing the members’ likes and dislikes, not only of their vehicles, but of the vehicle sub-systems, as well.

A few weeks ago, Ford Motor Co. quietly announced that it was rolling out a new wrinkle to the powerful safety feature called stability control, adding even more lifesaving potential to a technology that has already been very successful.

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